16:35:45 EDT Sun 09 Aug 2020
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Valeo Pharma Inc
Symbol VPH
Shares Issued 56,659,423
Close 2020-07-10 C$ 1.39
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Valeo Pharma closes $1.7M private placement

2020-07-10 15:59 ET - News Release

Mr. Steve Saviuk reports

VALEO PHARMA CLOSES $1.7 MILLION OVERSUBSCRIBED PRIVATE PLACEMENT

Valeo Pharma Inc. has closed a non-brokered oversubscribed $1.7-million private placement of non-convertible debenture units.

The company issued 1,700 unsecured non-convertible debenture units at a purchase price of $1,000 per debenture unit for gross proceeds of $1.7-million. Each unit consist of one 12 per cent unsecured non-convertible debenture of the company in the principal amount of $1,000 and 1,500 Class A share purchase warrants, both maturing on July 10, 2022. Each warrant entitles the holder thereof to purchase one Class A share of the company at an exercise price of 60 cents until the maturity date. In the event that the average volume-weighted average price (VWAP) of the company's shares over any 20 consecutive trading days is greater or equal to $1.10, the company may give notice to the warrantholder that it must exercise its remaining warrants within a period of 30 days from the date of receipt of the notice, failing which the warrants will automatically expire.

The net proceeds of the offering will be used to support the summer launch of four products and for working capital and general corporate purposes.

The securities issued under the private placement are subject to a four-month hold period in accordance with applicable securities legislation. The company has paid $36,250 as finders' fees to arm's-length parties in connection with the private placement, in compliance with applicable securities laws. No other broker or agent was involved in the transaction.

Manitex Capital Inc., the company's principal shareholder, along with senior executives, staff members and three directors of the company, all participated in the private placement for an aggregate amount of $390,000.

Participation of insiders of the company in the private placement constitutes a related-party transaction as defined under Regulation 61-101 (Protection of Minority Security Holders in Special Transactions). The company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(a) of Regulation 61-101 on the basis that participation in the private placement by insiders will not exceed 25 per cent of the fair market value of the company's market capitalization and also because the company's common shares trade only on the Canadian Securities Exchange. A material change report was not filed in connection with the participation of the insiders in at least 21 days in advance of the closing of the private placement, which the company deemed reasonable in the circumstances, in order to close the transaction as soon as practicable to enable it to use the funds.

About Valeo Pharma Inc.

Valeo Pharma is a specialty pharmaceutical company dedicated to the commercialization of innovative prescription products in Canada. With a focus on neurodegenerative diseases, oncology and hospital specialty products, Valeo Pharma has a growing portfolio of innovative products and the full infrastructure to properly manage these products through all stages of commercialization.

We seek Safe Harbor.

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